Credit is becoming more and more popular

Research shows that in our country a lot of people take cash loans. This parameter is actually increasing year by year. It should be emphasized that such financial products can be used to finance many aspects. Some people take cash loans because they want to have money for holidays, organize family celebrations or buy a new car, etc. There are really many possibilities. What should you do when you took out a cash loan under time pressure and did not carefully consider the financial conditions, so you have to pay unattractive – from your point of view – installments of each subsequent month?

Refinance of a cash loan

Fortunately, there is a way out of this situation. It is refinancing a cash loan. It should be emphasized that a lot of people are choosing such a solution. However, this can not be surprising. It must be emphasized that it is nothing else but the transfer of the current commitment to another institution. It often happens that people quickly need cash. Therefore, they decide on the first of the offer that will fall into their eye. It is not uncommon for them to be attractive in financial terms. It should be emphasized that many people are aware of this aspect only when they have to pay the installment… Does it sound not quite serious? Unfortunately, this is a frequently occurring situation. However, nothing prevents you from refinancing a cash loan. It is worth noting that there is no shortage of foreign or domestic banks that offer this option. Thanks to that you can definitely pay less money on this account. Often financial conditions are much better, which, of course, translates into the state of the portfolio.

What to do to refinance a cash loan is a good choice

This time you have to spend a moment of your free time to compare the available offers. There are many different types of rankings on the Internet. A comparison of banking institutions operating in this category will definitely help you choose the best possible refinancing of a cash loan. It is very important to pay attention to a parameter such as rrso. This is the actual annual interest rate that best shows all the costs associated with a specific financial product. No wonder that there is no shortage of people who are guided by these tips. This is a great way to get a profitable refinancing of a cash loan, pay lower installments and simply enjoy everyday life more. It can not be concealed that high commitments often sleep with their eyelids… However, there is an effective way out of this situation.

In many cases, consumers only need a smaller amount to settle outstanding bills or make an acquisition. Often an urgent car repair comes just when there are no reserves. Anyone who resorts to his discretionary credit in such a case must pay high interest rates for this. Significantly cheaper is the inclusion of a small loan. If the checking account is already overdrawn, this can be compensated with a small loan and high costs can be saved. There is no exact definition for a microcredit. In general, this means loans with an amount between 500 and 5,000 euros. If you need a lower loan, you should take a look at the subject of mini credit.

Advantages of small loans:

Small loans over the Internet allow a quick and easy processing of the request as well as a quick payment of the loan amount.

Due to the small amount, a small loan in a few installments can be traced back.

About an online comparison can be found in a few moments the cheapest offer

Requirements for a small loan

Even if a small loan involves relatively small sums, some credit requirements must also be fulfilled for this purpose. The guidelines for a lending are the same for most banks, about individual deviations inform a credit comparison or the websites of the credit institutions. As with any loan, the borrower must be at least 18 years old and have a residence in Germany. In addition, most banks require a German checking account.

Other requirements include a regular income and, if possible, a permanent employment contract. Anyone who has a fixed-term employment contract can still receive a small loan if it is valid beyond the repayment term. The income level must be proven when applying for the small loan. Employees simply add the last payroll statements. For self-employed and freelancers, the requirements are slightly higher. Depending on the size of the loan, the latest tax returns as well as profit and loss statements or a business analysis (BWA) are required.

Here are the requirements at a glance:

the borrower must be at least 18 years old

his residence must be Germany

a German checking account is usually required

a regular income must be demonstrable

a permanent employment contract helps

Even with small loans, the Private credit is queried

Before granting a small loan, the financial institutions carry out a credit check. This includes income as well as a query of the Private credit data. By means of such a query banks try to keep the default risk as low as possible. Among other things, banks are finding out whether the applicant is repaying further loans. In addition, the Private credit file shows how reliable payment behavior is in the past. Negative entries almost always lead to a rejection of the request. It is also conceivable that the small loan is only granted at a higher interest rate.

Small loans without Private credit

If the bank rejects the loan application due to a negative Private credit, there is still the chance of a Private credit-free microcredit. These are offered by various credit intermediaries directly via the Internet. Possible are small loans up to an amount of 3,500 euros. Since the loan is realized via a foreign bank, no query is required from Private credit. All that is required is a sufficiently high income. Such a loan could be, for example, the Swiss loan.

Before deciding on a small loan without Private credit, a few things should be considered. For example, there are some rogue vendors among the intermediaries who charge a down payment for fees and commissions. It also means hands off, if the granting of the credit is made dependent on the conclusion of an insurance. It should also be noted that the higher risk associated with Private credit-free loans requires a higher interest rate.

Small loans are flexible

A big advantage of small loans is the free choice of purpose. Whether the loan amount is used for the next vacation, a used car, a TV or to reschedule existing liabilities is completely irrelevant. This gives the borrower full flexibility and a financial room for maneuver, which would not be the case with real estate loans or car loans.

Small loans are usually offered for amounts between 500 and 5,000 euros. That is why they are used primarily to finance consumer wishes. Due to the rather small loan amount, banks usually only charge a very low interest rate. This makes the small loan an ideal alternative for a current account credit. Other debts can easily be rescheduled with a small loan, to avoid unnecessary fees for collection or reminder.

Despite the small amount, small loans can be repaid flexibly. The banks offer their small loans with up to 84 monthly installments. The monthly burden is correspondingly low. If the financial situation improves during the repayment term, the loan can of course also be repaid faster. For this purpose, borrowers should make sure that special payments and early repayment are possible for free.

Small loan with online instant confirmation

Anyone who has to settle an urgent bill with the microcredit or wants to take advantage of a short-term special offer depends on a swift decision by the bank. Branch banks, however, often spend a lot of time before they come to a decision. The whole thing goes much faster with an instant loan over the internet. Here, the applicant already knows after a few hours, whether the small loan is granted. A preliminary credit check is carried out using a standardized test procedure. For a correct examination, it is important that the applicant provides all the information needed truthfully. Misrepresentations would also make no sense, as they must be proven by documents.

We have already underlined how the period of economic crisis negatively affects household spending capacity and credit disbursement : if the available budgets are limited, more attention must be paid to outflows, including any installments of loans to be repaid.

If you have purchases or large expenses in the program, give yourself a maximum budget not to be exceeded. Consider also the maximum amount that you can repay every month when you decide to apply for a loan (” power of mortgage purchase “). If you choose to apply for a loan, whether it is finalized or not, analyze your economic situation over the entire duration of the contract before signing it.

It is very important to be attentive to the clauses and expense items that are proposed to you, to avoid finding you, under a contract already signed, with expenses that you did not foresee and that could put you in difficulty. Then check the pre-contractual information and the information that must be present in the contract.

Once you have this information, you can find the offer that best meets your needs and allows you not to exceed the budget you have set. To monitor your financial situation both at the time of access to credit, and in the repayment period of the installments, you can contact Advanti, a tool that allows you to plan debt in a conscious and sustainable way.

If these tips are valid for evaluating your financial situation and making appropriate choices, you should not forget creditworthiness. Have you always repaid the installments of your previous loans on time? Have you always been “good payers”? If you answered yes to the two questions, the information about you in the Credit Information Systems will be positive and you probably will not have trouble getting a new loan.